Summary
of Case: Bartender was kidnaped from workplace, beaten, raped,
and severely injured physically and emotionally. Following a slow recovery,
she returned to part-time work. She claimed additional permanent partial
disability benefits for labor restriction, lost wages, and mental impairment.
She also claimed the insurer had been unreasonable in its position on
certain medical testing and medications and in denying PPD benefits
for physical restrictions and wage loss. Finally, she argued that section
39-71-703(3) and -711, MCA (1991) were unconstitutional if read to deny
her an impairment award for a mental impairment

Held:
Claimant is entitled to additional PPD benefits in the form of 10% for
physical restrictions and 20% for wage loss. As the insurer conceded,
10% was appropriate where claimant's time of injury job was medium duty
and she could work only light-duty post-injury. The 20% for wage loss
was based on the WCC's finding claimant suffered over a $2.00 an hour
wage loss, a finding based on taking into account claimant's post-injury
inability to work her pre-injury number of hours. The WCC refused to
award benefits for mental impairment where the psychiatrist testifying
refused to assign a percentage for mental impairment in light of the
recommendation against making such determinations for mental impairments
stated in the 4th Edition of the AMA Guides to Impairment. Penalty was
awarded with respect to (1) the 10% award for physical restrictions,
(2) one half of the 20% wage loss award; and (3) the amounts due for
an MRI and EMG the insurer had refused to cover. Penalty was not awarded
with regard to (1) State Fund's assertion of a subrogation interest
in a third-party recovery, which assertion was dropped; (2) claimant's
request for further impairment award; and (3) a prescription the insurer
had denied. Attorneys fees were denied because the insurer had conceded
liability pre-hearing on relevant matters.

Constitutions, Statutes,
Regulations and Rules: Montana Code: section 39-71-2907, MCA (1991).
Penalty was awarded with respect to (1) a 10% award for physical
restrictions, (2) one half of a 20% wage loss award; and (3) the
amounts due for an MRI and EMG the insurer had refused to cover.
Penalty was not awarded with regard to (1) insurer's assertion of
a subrogation interest in a third-party recovery, which assertion
was dropped and was not, in any event, relating to benefits due;
(2) claimant's request for further impairment award; and (3) a prescription
the insurer had denied.

Benefits: Impairment
Awards: Mental Impairment. WCC held claimant not entitled to
mental impairment award where the psychiatrist testifying refused
to assign a percentage for mental impairment in light of the recommendation
against making such determinations for mental impairments stated
in the 4th Edition of the AMA Guides to Impairment. See S.L.H. v.
State Compensation Insurance Fund, 2000 MTWCC 362, 303 Mont. 364,
15 P.2d 948, reversing on this ground, and S.L.H. v. State Compensation
Fund, 1999 MTWCC 6A, on remand from Supreme Court.

Benefits:
Permanent Partial Disability: Labor Capacity. Claimant who was
kidnaped from work and received severe physical and emotional injuries
was entitled to additional PPD benefits in the form of 10% for physical
restrictions. As the insurer conceded, 10% was appropriate where
claimant's time of injury job was medium duty and she could work
only light-duty post-injury.

Benefits:
Permanent Partial Disability: Lost Earning Capacity. Claimant
is entitled to additional PPD benefits in the form of 20% for wage
loss. The 20% for wage loss was based on the WCC's finding claimant
suffered over a $2.00 an hour wage loss, a finding based on taking
into account claimant's post-injury inability to work her pre-injury
number of hours. An absurd result would be produced if the Court were
to construe section 39-71-303(3)(c), MCA (1991) as requiring comparison
of pre-injury and post-injury wage rates without taking into account
claimant's inability to work the number of hours she worked pre-injury
as the result of the injury.

Penalties:
Insurers. Penalty was awarded with respect to (1) a 10% award
for physical restrictions, (2) one half of a 20% wage loss award;
and (3) the amounts due for an MRI and EMG the insurer had refused
to cover. Penalty was not awarded with regard to (1) insurer's assertion
of a subrogation interest in a third-party recovery, which assertion
was dropped and was not, in any event, relating to benefits due; (2)
claimant's request for further impairment award; and (3) a prescription
the insurer had denied.

¶1 The trial
in this matter convened on September 15, 1998, in Great Falls, Montana
and recessed at 5:00 p.m. The trial reconvened on September 30, 1998,
in Great Falls. Petitioner, S.L.H. (claimant), was present and represented
by Ms. Sara R. Sexe. Respondent, State Compensation Insurance Fund (State
Fund), was represented by Mr. William O. Bronson. The testimony of Dr.
Mary Ann Evans has been transcribed. No other parts of the trial have
been transcribed.

2. Whether
the State Fund unreasonably refused or delayed the authorization for
the medical care requested by Dr. Dietrich, including an EMG, MRI,
and gastrointestinal medications, thereby entitling Petitioner to
attorneys' fees, costs and a penalty.

3. Whether
Petitioner has not been made whole by the third-party settlement of
her negligence claim against the alarm installer, thereby precluding
the State Fund from exercising its subrogation interest?

4. Whether
the State Fund's actions in denying, delaying, or refusing authorization
for, [sic] benefits was unreasonable, thereby entitling Petitioner
to her attorney's fees, costs, and a penalty?

5. Whether
the State Fund's [position] forcing Petitioner to litigate the subrogation
issue, given the facts of the case, subjects the State Fund to the
payment of attorney's fees, costs and a penalty.

¶5 Waiver
of Subrogation Claim: At trial the State Fund expressly waived
any claim to subrogation. Therefore, that issue is not addressed.

¶6 Additional
Issue Not Raised in Pretrial Order: At trial the parties agreed
that petitioner may submit a post-trial challenge to the constitutionality
of sections 39-71-703(3) and -711, MCA (1991), insofar as those sections
preclude an impairment award for mental or psychological injuries.
That issue was the subject of post-trial briefing and finally submitted
for decision on December 22, 1998.

¶7 Bench
Rulings: At the time of trial, the Court made the following bench
rulings:

1. Claimant
is not entitled to an impairment award with respect to her psychological
injuries since she could not establish a percentage rating under the
AMA Guides to Impairment.

2. Based
on the evidence presented at trial, claimant is entitled to a 20%
award for lost wages based on an actual wage loss of more than $2.00.

3. The claimant
is not entitled to attorney's fees or a penalty with respect to the
State Fund's subrogation claim.O'Brien v. State
Compensation Insurance Fund, WCC No. 9710-7854, findings of fact,
conclusions of law and judgment (February 10, 1998) (holding that
the waiver of a subrogation claim is not a benefit within the meaning
of the Workers' Compensation Act and therefore not something to which
a penalty may attach).

4. At trial
the State Fund conceded liability for a 10% award for physical restrictions.
Claimant is further entitled to a penalty and attorney's fees with
respect to that 10% award since Dr. Patrick Galvas had restricted
claimant to light duty in March 1998 (Ex. 41 at 2) and the State Fund
was aware of the restriction and of the fact that claimant was performing
at least medium-duty work in her time-of-injury job. [Upon further
consideration, for the reasons set forth in the Conclusions of Law
the Court has voided the attorney fee award.]

5. The claimant
is entitled to a penalty and attorney's fees with respect to its denial
of an EMG and MRI ordered by Dr. Dietrich. At trial the State Fund
agreed to pay for the procedures.

¶8 Issues
Remaining: The following issues remain for the Court's decision:

1. Whether
the State Fund unreasonably refused or delayed authorization for gastrointestinal
medications requested by Dr. Dietrich, thereby entitling claimant
to attorney's fees and a penalty.

2. Whether
claimant is entitled to attorney's fees and a penalty with respect
to the remaining 10% award for wage loss.

3. Whether
sections 39-71-703(3) and -711, MCA (1991), are unconstitutional insofar
as they preclude the Court from awarding claimant an impairment award
for her psychological injuries, and if so what is the amount that
should be awarded claimant with respect to her psychological impairment?

¶9 Having considered
the pretrial order, the testimony presented at trial, the demeanor and
credibility of the witnesses, the deposition and exhibits, and the arguments
of the parties, the Court makes the following:

FINDINGS OF FACT

¶10 Claimant is 34 years old.
She is a high school graduate and has also completed some vocational technical
school courses.

¶12 In 1991 she was hired by
Thirsty's Bar (Thirsty's) as a bartender. She worked approximately 32
hours a week and was paid $7.00 an hour. In addition to serving drinks
to customers, she was responsible for the cash drawers and for stocking
beer, soft drinks and wine coolers. She worked evenings.

Industrial
Injury

¶13 On November 13, 1991, the
claimant was kidnaped from her place of employment. Her kidnaper forced
her into her vehicle and ordered her to drive away from her employment.
After she drove away, he made her stop the car. He then brutally beat
and repeatedly raped her. He threatened her life with a knife and a gun
and slit her throat.

¶14 The assault and rape resulted
in severe physical and psychological injuries to the claimant.

¶15 At the time of the kidnaping,
assault and rape, Thirsty's was insured by the State Fund. Claimant submitted
a claim for compensation to the State Fund, which accepted liability and
commenced paying medical and temporary total disability benefits.

Recovery

¶16 Claimant's recovery has
been slow and difficult. She was not declared at maximum healing until
October 1997, and has been released by her psychiatrist to part-time work
only. She was out of work until May 1998, when, with rehabilitation assistance,
she took a part-time job at Pizza Hut paying $5.15 an hour. Her temporary
total disability benefits were discontinued on March 15, 1998, when she
was placed on rehabilitation benefits.

Permanent
Partial Disability

I. Labor Restriction

¶17 A Functional Capacity Evaluation
(FCE) of claimant was done by Dr. Patrick Galvas (Dr. Galvas) in January
1998. Based on the FCE, claimant is physically able to perform only light-labor.
(Ex. 41 at 2.)

¶18 Claimant testified that
her job at Thirsty's required her to lift in excess of 50 pounds. She
was required to move beer kegs and garbage cans, and also testified that
she acted as a bouncer of sorts.

¶19 In September 1998, the
claimant's job at Thirsty's was evaluated by Micki Marion Breedlove (Marion),
a vocational consultant working for Crawford & Company (Crawford).
Marion testified that claimant's job required only medium labor. She was
not required to lift kegs, only to tip and shove them, efforts requiring
35 to 37 pounds of force. Full garbage cans weighed 25 to 30 pounds. A
case of beer weighed 31 pounds. Acting as a bouncer was not part of her
duties.

¶21 At trial the State Fund
conceded that claimant is entitled to a 10% award based on a restriction
to light-labor activity. § 39-71-703(3)(d), MCA (1991). In light of the
previous finding, claimant is entitled to no further award for physical
restrictions.

II. Lost Wages

¶22 At the time of her injury,
claimant was earning $7 an hour and she was working 32 hours a week. (Trial
Test.)

¶23 In May 1997 Marion was
assigned to address claimant's employment potential and to provide a rehabilitation
recommendation. Ultimately, she developed a rehabilitation plan calling
for job placement services from March 16, 1998 until June 7, 1998. (Ex.
1 at 28.)

¶24 Dr. Mary Ann Evans (Dr.
Evans), a psychiatrist who has treated claimant for post-traumatic stress
syndrome, major depression, and cognitive deficits arising from the physical
and mental trauma she suffered on November 13, 1991, testified that claimant
is not yet ready and able to return to work full time. She noted that
claimant had spent seven years out of the work force. While she is hopeful
that claimant may return to full-time work in the future, she is unable
to predict when that will occur. (Trial Test.; Ex. 30 at 5.)

¶25 Marion was aware of Dr.
Evans' opinion that claimant is able to work only part-time and assisted
claimant in finding a part-time, temporary job at Pizza Hut. Claimant
began working at Pizza Hut in Great Falls on May 1, 1998. However, at
the time of trial she was no longer employed. (Trial Test.; Ex. 1.)

¶26 While working part-time
for Pizza Hut, claimant earned $5.15 an hour. (Id.) The job at
Pizza Hut is her only employment since 1991.

¶28 On an absolute hourly basis
the claimant's Pizza Hut wage was $1.85 an hour less than her time-of-injury
job. However, if her weekly pay is averaged over her time of injury work-week
of 32 hours, her hourly wage on that basis was more than $2.00 an hour
less. Moreover, since leaving Pizza Hut, she has had no earnings.

III. Impairment

¶29 Dr. Galvas, who has treated
claimant for her physical injuries, declared claimant at maximum medical
healing in October 1997. At that time he rated her physical impairment
at 11% of the whole person.

¶30 In his office notes Dr.
Galvas explained how he arrived at that impairment rating:

CALCULATION OF TOTAL
PERCENT IMPAIRMENT OF WHOLE PERSON: The Combined Values Chart
on page 322 was utilized in arriving at the total impairment. A 5 percent
impairment of whole person for traumatic brain injury combined with
a 1 percent impairment of whole person for post-traumatic stress disorder
equals a 6 percent impairment of whole person. A 6 percent impairment
of whole person combined with a 2 percent impairment of whole person
for seizure disorder equals and [sic] 8 percent of whole person. An
8 percent of whole person combined with a 3 percent impairment of whole
person for left ankle fracture equals an 11 percent impairment person.

(Ex. 40 at 5.)

¶31 Claimant contends that
she is entitled to an additional impairment rating as a result of the
psychological injuries she suffered. She sought to establish a further
impairment rating through the testimony of Dr. Evans.

¶32 Dr. Evans, who is board
certified in psychiatry, has treated claimant since September 1995. In
her opinion claimant suffers from three major diagnoses: major depressive
disorder, post-traumatic stress disorder (PTSD), and cognitive disorder,
NOS [not otherwise specified]. (Partial Tr. at 10.)

¶33 Dr. Evans evaluated claimant's
impairment utilizing the third edition of the American Medical Association's
Guides. Chapter 14 governs impairment due to mental and behavioral disorders.
It sets out four areas of functional limitation. Within each area the
Guides set out criteria for assessing the severity of impairment. The
areas are: activities of daily living, social functioning, concentration,
and adaptation. (american medical association, guides to the evaluation
of permanent impairment [ama guides], 3rd ed. (1990) at 237;
Ex. 38 at 5.)

¶34 The ama guides provide
for the assignment of mental and behavioral disorders to five classes
which range from no impairment (Class 1) to extreme impairment (Class
5) which "preclude[s] useful function." Dr. Evans' opinion is that overall
claimant falls between Class 3, which is moderate impairment, and Class
2, which is mild impairment. (Partial Tr. at 54-55.) In terms of her depression
claimant suffers mild impairment, placing her in Class 2. With respect
to her PTSD she suffers moderate impairment, placing her in Class 3. (Id.
at 58.) Dr. Evan's ascribes both impairments to the claimant's 1991 injuries.

¶35 In the individual categories
she evaluated, Dr. Evans rated claimant as mildly impaired in activities
of daily living, mild to moderately impaired in the area of social functioning,
moderately impaired in the area of concentration, and mildly impaired
in her adaptation to stressful circumstances. (Trial Test.)

¶36 However, Dr. Evans was
unable to translate the impairment into a percentage. She testified:

I don't feel comfortable
with it. I am not trained in it. I am not trained to assign numbers.
That's not my field of expertise.

(Partial Tr. at 54.)

¶37 Dr. Evans' inability to
assign a percentage impairment rating is due in large part to the failure
of the ama guides to provide for percentage impairments for mental and
behavioral disorders. Actually, it is not a "failure" on the part of the
ama guides, rather the ama guides state that mental impairment cannot
be objectively quantified as can physical conditions. (ama guides at 241;
Ex. 38 at 9.)

Reasonableness
of Insurer's Denials

I. Medical Tests and Medications
Prescribed by Dr. Dietrich

¶38 Dr. Dennis Dietrich (Dr.
Dietrich) is a board certified neurologist. Since 1992 he has treated
claimant for a post-concussion disorder and other complaints which stem
from her 1991 injuries.

¶39 On March 12, 1998, Dr.
Dietrich examined claimant. He noted at that time that claimant was "having
more pain in the back and left leg" that the increased pain was curtailing
her activities. (Ex. 15 at 1.) He further noted:

She did have an MRI about
15 months ago which showed slight disc bulging at L4-5 but nothing significant.
She has not had an EMG for a number of years.

(Id.) He determined
that new MRI and EMG studies should be done. (Id.) Also noting
claimant's "reflux" complaints, he renewed her prescription for Prevacid.

¶40 On March 18, 1998, Dr.
Dietrich's office contacted Patricia Hunt (Hunt), the claims adjuster
assigned to claimant's case, and requested authorization to proceed with
the MRI and EMG. Hunt requested further information. A copy of the doctor's
March 12, 1998 notes was faxed to her.

¶41 Hunt then denied the request.
She did so because an MRI had been done in 1996, an EMG had been done
sometime in the past, and claimant had been declared at MMI with respect
to her back in 1993 and again in 1997. She also denied payment for the
Prevacid prescription because she viewed claimant's reflux problems more
related to the stress of an upcoming federal civil trial against the manufacturer
of the security alarm at Thirsty's and because other less expensive drugs
are available to treat reflux.

¶42 In denying authorization
for the MRI, EMG and Prevacid, Hunt acted on her own without any medical
consultation or advice (other than the advice supplied by Dr. Dietrich.)

¶43 In his deposition, Dr.
Dietrich testified to the need for updated, new MRI and EMG studies. He
testified:

A. A number of years ago,
we diagnosed a neuralgic paresthesia, which was a condition of numbness
of the thigh due to an injury to her leg, and I guess lower abdomen,
which we thought that was related to her assault.

She then has since developed
this back and leg pain, and she has had a number of falls over the last
few years, some of them have a serious nature, one in which she actually
broke her leg.

Those have been, I felt,
related to difficulty with equilibrium and dizziness, which she had,
which was a result of a concussion she experienced at the time of her
assault.

So my concern is one of
these falls may have caused worsening of a problem in the spine. Since
the last evaluation it was more - I guess now it would now be almost
two years ago.

. . . .

In 1995, I saw her after
she had one of these falls, in particular one that resulted in breaking
her leg.

After this, she had developed
some numbness of the left thigh, and then she started developing some
difficulty with back pain and spasms in her back.

It was after that that Dr.
Mahan performed an MRI scan of her spine, and we did an EMG and nerve
conduction test. There was some evidence of disc bulging on the MRI,
but we couldn't prove that that was causing any nerve problems, affecting
her leg.

Recently the symptoms had
became [sic] more persistent with this pain, and my concern is further
problems have developed with regard to her spine.

Q. And that's the reason
that you have ordered the additional testing?

A. Yes.

(Dietrich Dep. at 8-9, 16.)

¶44 Dr. Dietrich further testified
that claimant suffers from gastroesophageal reflux, which means that she
experiences a burning sensation in her stomach and esophagus. (Dietrich
Dep. at 17.) Referring to information provided by Dr. Smith, who had previously
treated claimant for hyper acidity, he noted that in September 1997, Dr.
Smith had found inflamation in the back of her larynx due to reflux. Dr.
Dietrich noted that an impending federal trial was causing claimant severe
stress, "worsening" her underlying condition. (Id. at 18-19.)

¶45 In Dr. Dietrich's opinion,
while claimant has a long history of acid reflux, her condition has worsened
since the 1991 assault. (Dietrich Dep. at 26.) He opined that claimant's
need for gastrointestinal medication is due primarily to "the ongoing
stress of dealing with the various physical symptoms that she has in combination
with post-traumatic stress disorder. . . ." (Id. at 19.) Dr.
Dietrich's office notes of November 26, 1997, also indicate that he felt
that the upcoming trial, as well as stress related to her workers' compensation
case, were contributing to her condition. (Ex. 15 at 2.) He summarized
as follows:

I would view this as an
exacerbation of an underlying condition due to the stress, mostly all
of which is connected in some way to her assault and subsequent problems.

(Id.) He confirmed
that opinion in his deposition. (Dietrich Dep. at 25-26.)

¶46 Following Dr. Dietrich's
deposition the State Fund authorized the MRI and EMG studies and agreed
to reimburse claimant for the Prevacid prescriptions.

¶47 The State Fund's denial
of authorization for the MRI and EMG studies was unreasonable. The questions
raised by the claims adjuster were legitimate questions, however, in disregarding
Dr. Dietrich's advice she made a medical decision she was not qualified
to make.

¶48 The State Fund's denial
of payment for the Prevacid was not unreasonable. Dr. Dietrich's medical
notes indicate that prior to the fall of 1997, the claimant's reflux had
been adequately treated by lower cost medications and that the need for
the higher priced medication occurred when claimant was under additional
stress due to an impending federal trial. The State Fund's liability for
the more expensive medication was reasonably debatable as it may be reasonably
argued that the more costly medication is attributable to the stress of
the impending trial, not to the injury, and that the State Fund's liability
should have been limited to the lower cost medication.

II. Physical Restrictions

¶49 The State Fund conceded
a 10% award for physical restrictions shortly before trial. However, it
should have been apparent to the State Fund long before then that claimant
was entitled to the 10% award. Dr. Galvas ordered an FCE in January 1998
and the State Fund was aware of the FCE results limiting claimant to light
labor at least as early as March 24, 1998. (Ex. 41.) In reviewing actual
results from the FCE, the claims examiner interpreted them as indicating
claimant could perform medium labor, however, her interpretation was inconsistent
with the statutory definition of medium labor. (Ex. 41 and § 39-71-703
(6)(b), MCA (1991).) Moreover, no job analysis of the time-of-injury job
was ordered or performed until September 1998 despite the fact that the
rehabilitation provider had been working on the case since May 1997.

¶50 The State Fund could and
should have determined that claimant was entitled to 10% for physical
restrictions in March or April 1998 and its delay in making that determination
was unreasonable.

III. Wage Loss

¶51 As noted in earlier findings,
on May 1, 1998, claimant obtained part-time employment at Pizza Hut at
a starting wage of $5.15 an hour. (Id. at 20.) She was scheduled
to work 20 hours per week.

¶52 Although claimant had secured
employment at Pizza Hut, Marion continued providing her with job placement
assistance with a view to placing claimant in a clerical position. (Id.)
Marion also sought to place claimant in retail sales and other positions.
(Id. at 1-16.) As set out in reports to the State Fund (id.),
most of the jobs paid between $5 and $6 an hour for entry level positions.

¶53 Hunt testified as to her
belief that claimant would not suffer a wage loss because she could be
retrained in computer use and obtain employment at $7.00 an hour or more.
Her analysis was unreasonable. Marion's reports in May and June 1998 plainly
showed that wages for positions in claimant's job market were in the $5.00
to $6.00 an hour range. Although, some jobs paying as high as $7.00 and
$7.50 an hour were identified, those jobs were the exception and typically
were wages paid after the employee gained experience in the position.
Without consideration of claimant's ability to work only part-time, by
June of 1998 it should have been clear to Hunt that claimant was entitled
to at least a 10% award for wage loss. § 39-71-703 (3)(c), MCA (1991).

¶54 However, the State Fund's
refusal to acquiesce to claimant's demand for 20% for wage loss was not
unreasonable. Her 20% entitlement, as found by the Court, requires consideration
of her inability to work as many hours post-injury as she worked preinjury,
and on averaging her weekly wages post-injury over her preinjury hours.
Section 39-71-703(3)(c), MCA (1991), speaks simply of a "wage loss of
less than $2 or less an hour" and a "wage loss of more than $2 an hour."
It does not address the precise time the wage loss is to be measured or
the period of time over which it should be measured. Those matters require
statutory interpretation. At the time it was analyzing this case it was
not unreasonable for the State Fund to simply compare the absolute hourly
rates pre- and post-injury.

¶57 Section 39-71-703(1) and
(2), MCA (1991), provides for when an injured worker is entitled to permanent
partial disability benefits and how that award must be calculated.

Section 39-71-703.
Compensation for permanent partial disability. (1) If an injured
worker suffers a permanent partial disability and is no longer entitled
to temporary total or permanent total disability benefits, the worker
is entitled to a permanent partial disability award.

(2) The permanent partial
disability award must be arrived at by multiplying the percentage arrived
at through the calculation provided in subsection (3) by 350 weeks.

(3) An award granted an
injured worker may not exceed a permanent partial disability rating
of 100%. The criteria for the rating of disability must be calculated
using the medical impairment rating as determined by the latest edition
of the American medical association Guides to the Evaluation of Permanent
Impairment. The percentage to be used in subsection (2) must be determined
by adding the following applicable percentages to the impairment rating:

(a) if the claimant is 30
years of age or younger at the time of injury, 0%; if the claimant is
over 30 years of age but under 56 years of age at the time of injury,
2%; and if the claimant is 56 years of age or older at the time of injury,
3%;

(b) for a worker who has
completed less than 9 years of education, 3%; for a worker who has completed
9 through 12 years of education or who has received a graduate equivalency
diploma, 2%; for a worker who has completed more than 12 years of education,
0%;

(c) if a worker has no wage
loss as a result of the industrial injury, 0%; if a worker has an actual
wage loss of $2 or less an hour as a result of the industrial injury,
10%; if a worker has an actual wage loss of more than $2 an hour as
a result of the industrial injury, 20%; and

(d) if a worker, at the
time of the injury, was performing heavy labor activity and after the
injury the worker can perform only light or sedentary labor activity,
20%; if a worker, at the time of injury, was performing heavy labor
activity and after the injury the worker can perform only medium labor
activity, 15%; if a worker was performing medium labor activity at the
time of the injury and after the injury the worker can perform only
light or sedentary labor activity, 10%.

¶58 The parties agree that
claimant is permanently partially disabled, thus she is eligible for an
impairment award and the other benefits available under subsection (3)
of section 39-71-703, MCA.

IV. Physical Restrictions

¶59 As a matter of fact, the
Court has found that the claimant's time-of-injury job involved medium-labor
activity. Following her injury she was restricted to light-labor activity.
Therefore, she is entitled to a 10% award for her physical restriction.
§ 39-71-703(3)(d), MCA (1991).

V. Wage Loss

¶60 Section 39-71-703(3)(c),
MCA (1991), refers to an "actual wage loss of $2 or less an hour" and
an "actual wage loss of more than $2 an hour." It does not specify the
precise time the wage loss is to be measured or the period of time over
which the loss should be measured. In many cases the lack of further specificity
makes no difference. For example, if an injured worker was working 40
hours a week and earning $7 an hour at the time of his injury and immediately
upon reaching maximum medical improvement goes back to work in a 40 hour
a week job at $5.15 an hour, his wage loss is $1.85 an hour and he is
entitled to 10%. But in some cases the injured worker does not return
to work immediately after reaching MMI and/or may not be capable of working
his preinjury hours. How is the wage loss measured in such cases?

¶61 In the recent case of McGillis
v. State Compensation Insurance Fund, WCC No. 9806-7995, findings
of fact, conclusions of law and judgment (November 2, 1998), I determined
that in such cases the Court must look to the general definition of wages
provided in section 39-71-123(3), MCA, of the Workers' Compensation Act.
Section 39-71-123(3)(1991), provides:

39-71-123. Wages
Defined.

. . . .

(3) For compensation benefit
purposes, the average actual earnings for the four pay periods immediately
preceding the injury are the employee's wages, except if:

(a) the term of employment
for the same employer is less than four pay periods, in which case the
employee's wages are the hourly rate times the number of hours in a
week for which the employee was hired to work; or

(b) for good cause shown
by the claimant, the use of the four pay periods does not accurately
reflect the claimant's employment history with the employer, in which
case the insurer may use additional pay periods.

Section 39-71-123(3), MCA,
acknowledges that an instantaneous slice of time may not accurately reflect
an employee's wages, thus as a general rule at least four weeks should
be considered. Section 39-71-123(b), MCA, acknowledges that in some cases
four weeks may not be a sufficient measure of wages and that a longer
time may be a better measure.

¶62 In this case, the claimant
returned to work at a job paying $5.15 an hour. At the time of trial,
she was no longer employed but the testimony and reports of Marion show
that she is capable of earning between $5.00 and $6.00 an hour. Thus,
she is entitled to at least 10% for wage loss.

¶63 However, post-injury the
claimant is unable to work the same number of hours a week as she worked
preinjury. Preinjury she was working 32 hours a week. Post-injury at Pizza
Hut she worked 20 hours a week. While both her psychiatrist and vocational
counselor were hopeful that claimant may ultimately be able increase her
hours of employment work up to full time, claimant has been unable to
do so, at least to the present time. (Ex. 1 at 8.)

¶64 Statutes must be construed
reasonably to avoid absurd results. Billings Properties, Inc. v.
Yellowstone County, 144 Mont. 25, 38, 394 P.2d 182, 198 (1964) ("Statutory
or constitutional construction should not lead to absurd results if reasonable
construction will avoid it."). If section 39-71-703(3)(c), MCA (1991),
is construed as requiring that the post-injury wage per hour be compared
with the preinjury hourly wage without consideration of the number of
hours of employment, then a worker who preinjury was working 40 hours
a week at $7.00 but post-injury can work only 10 hours a week but still
earn $7.00 an hour during those 10 hours would suffer no
"wage loss" under the section. That result is contrary to the plain meaning
of "wage loss." It is also contrary to the first phrase of the subsection
which, without regard to an hourly rate, provides that a worker
is entitled to no wage loss benefits only if the worker "has no wage loss
as a result of the industrial injury." A worker who cannot work as many
hours post-injury as preinjury has a "wage loss" even if she can work
at the preinjury "hourly" wage, thus an interpretation of the subsection
as limiting wage loss comparisons to absolute hourly rates would fly in
the face of the plain meaning of "wage loss" and the language of the first
phrase of the subsection.

¶65 The only way to compute
wages in such cases, and thereby avoid an absurd result, is to divide
the weekly post-injury compensation by the number of hours the worker
was employed per week preinjury. That will provide an hourly rate based
on the number of preinjury hours and result in a reasonable comparison
of pre- and post-injury wages. In this case, claimant returned to work
at a $5.15 an hour job for 20 hours a week, earning $103.00 weekly. On
a 32-hour work week basis she earned $3.21 an hour. Even at $6.00 an hour
for 20 hours a week, on a 32-hour work week basis she would earn $3.75
an hour. In either case she experienced more than a $2.00 an hour wage
loss based on a 32 hour week and is entitled to a 20% award.

(3) An award granted an
injured worker may not exceed a permanent partial disability rating
of 100%. The criteria for the rating of disability must be calculated
using the medical impairment rating as determined by the latest
edition of the American medical association Guides to the Evaluation
of Permanent Impairment. . . . [Emphasis added.]

(a) is a purely medical
determination and must be determined by an impairment evaluator after
a claimant has reached maximum healing;

(b) must be based on the
current edition of the Guides to Evaluation of Permanent Impairment
published by the American medical association; and

(c) must be expressed as
a percentage of the whole person.

(2) A claimant or insurer,
or both, may obtain an impairment rating from an evaluator who is a
medical doctor or from an evaluator who is a chiropractor if the injury
falls within the scope of chiropractic practice. If the claimant and
insurer cannot agree upon the rating, the mediation procedure in part
24 of this chapter must be followed.

(3) An evaluator must be
a physician licensed under Title 37, chapter 3, except if the claimant's
treating physician is a chiropractor, the evaluator may be a chiropractor
who is certified as an evaluator under chapter 12.

(4) Disputes over impairment
ratings are not subject to 39-71-605.

¶68 The 11% impairment rating
rendered by Dr. Galvas was not disputed by the State Fund and has presumably
been paid. Claimant contends, however, that she is entitled to an additional
25% to 49% impairment award on account of her mental injuries. (petitioner's
proposed findings of fact, conclusions of law and judgment at 15.)

¶69 Claimant's request for
an additional impairment rating and payment fails for lack of evidence.
Dr. Evans could not provide a percentage impairment rating. Section 39-71-711,
MCA, provides than an impairment rating is a medical determination which
must be made by a physician. The Court cannot supply an impairment rating
where a physician does not.

B. Constitutional Challenge

¶70 Dr. Evans' inability to
provide a percentage impairment rating was due in large part to the failure
of the ama guides to provide for percentage ratings for mental impairment.
Both the third edition of the ama guides, which was in effect at the time
of claimant's injuries, and the fourth edition, which is the current edition,
provide for evaluation for four types of functioning -- (1) activities
of daily living, (2) social functioning, (3) concentration, and (4) adaptation.
They further provide five classes of impairment, ranging from no impairment
[class 1] to extreme impairment [class 5] for each of the four functions.
ama guides, 3rd ed. at 241, 4th ed. at 301; Exhibits
38 and 39.

¶71 The text of both editions
make it clear that the impairment for mental disorders is limited to the
five classes and is not intended to be converted into a percentage. The
third edition says:

Translating these guidelines
for rating individual impairment on ordinal scales into a method
for assigning percentage impairments, as if the ratings were made on
precisely measured interval scales, is not recommended. For
example, we cannot be certain that the difference in impairment between
a rating of mild and moderate is the same as the difference between
moderate and marked. Furthermore, a moderate impairment does not imply
50% limitation in useful function. Similarly, a rating of moderate impairment
in all four areas of function does not imply a 50% impairment of the
whole person. In reality, however, physicians often are required to
make such judgment. It is important to remember that such judgments
are based on clinical impression rather than on empirical evidence.
In those circumstances in which it is essential to make a percentage
rating, the ordinal scale might be of some help: one could assume that
the extreme rating approaching 100% mental impairment is similar to
a coma, which is the extreme impairment of central nervous system function
and level of consciousness.

Eventually research may
support the direct link between medical findings and percentage of mental
impairment. Until that time the medical profession must refine its concepts
of mental impairment, improve its ability to measure limitations, and
continue to make clinical judgments.

The fourth edition is even
more emphatic, pointing out that, unlike ratings for physical impairments,
there is no objective basis for rendering a percentage impairment with
respect to mental impairments:

Comment on Lack
of Percents in This Edition

The decision not to use
percentages for estimates of mental impairment in this fourth edition
of the Guides was made only after considerable thought and
discussion. The second edition (1984) provided ranges of percentages
for estimating such impairment. Mental functions, such as intelligence,
thinking, perception, judgment, affect, and behavior, were considered
to fall into five classes, and the ranges were given as follows: normal,
0% to 5%; mild impairment, 10% to 20%; moderate impairment, 25% to 50%;
moderately severe impairment, 55% to 75%; and severe impairment, more
than 75%. Ability to carry out daily activities was estimated as follows:
class 1, self-sufficient; class 2, needs minor help; class 3, needs
regular help; class 4, needs major help; and class 5, quite helpless.
From estimates of the individual's functioning, a whole-person impairment
estimate could be made.

The procedure for the second
edition was highly subjective. The third edition (1988) did not list
percentages but instead provided the same classes of impairment as the
fourth edition. There are some valid reasons to use ranges of percents
for mental impairments. If this were done, the chapter on mental disorders
would be consistent with Guides chapters for the other organ
systems. Another point is that various systems for estimating disability
have developed ranges of percentages; if such estimates were not provided
in the Guides, the material in the Guides on mental
disorders might be ignored. This would increase the likelihood that
estimates would be made inconsistently in the various jurisdictions.

A more persuasive argument
is that, unlike the situations with some organ systems, there are no
precise measures of impairment in mental disorders. The use of percentages
implies a certainty that does not exist, and the percentages are likely
to be used inflexibly by adjudicators, who then are less likely to take
into account the many factors that influence mental and behavioral impairment.
Also, because no data exist that show the reliability of the impairment
percentages, it would be difficult for Guides users to defend
their use in administrative hearings. After considering this difficult
matter, the Committee on Disability and Rehabilitation of the American
Psychiatric Association advised Guides' contributors against
the use of percentages in the chapter on mental and behavioral disorders
of the fourth edition.

¶72 Insofar as impairment ratings
rendered pursuant to sections 39-31-703 (3) and -711 (1), MCA, rely on
either the third or fourth edition of the ama guides, claimant challenges
the constitutionality of the sections. She argues that the failure of
the sections, via the ama guides, to provide for percentage ratings and
monetary awards for mental impairments violates her rights to equal protection
of the laws and to due process of law. U.S. Constitution, Amend. XIV;
Mont. Const., Art. II, §§ 4 and 17.

¶73 As an initial matter, claimant
must overcome the presumption that the statutes are constitutional. Heisler
v. Hines Motor Co.,282 Mont. 270, 279, 937 P.2d
45, 50 (1997) (citations omitted). To succeed in her challenge, she must
prove the challenged statute to be unconstitutional beyond a reasonable
doubt; if any doubt exists the Court must resolve it in favor of the statute.
Id. at 279,937 P.2d at 50.

¶74 Claimant's argument is
straight forward. She contends that the statutes, through the ama guides,
make it impossible to obtain an impairment award for a mental impairment
and that they therefore provide disparate and arbitrary treatment of mental
disorders in comparison to physical disorders.

¶75 Claimant is correct in
contending that no impairment award is available for mental disorders
whereas an award is available for physical impairments. However, she is
incorrect in contending that the distinction between mental and physical
impairments is arbitrary and violates equal protection and due process
principles.

[T]he State cannot use its
power to take unreasonable, arbitrary or capricious action against an
individual. Therefore, in order to satisfy guarantees of substantive
due process, a statute enacted by the legislature must be reasonably
related to a permissible legislative objective.

Id. at 250, 883 P.2d
at 801 (citations omitted).

¶77 As stated in section 39-71-711,
MCA, impairment ratings are a medical determination. They are intended
to objectively quantify loss of function, however, they imperfectly correlate
with disability. A person who has lost a leg in a work- related injury
may have a relatively high impairment rating, but if that person is a
lawyer may suffer no disability within the meaning of the Workers' Compensation
Act.

¶78 The third and fourth editions
of the ama guides provide a reasonable, if not compelling, justification
for distinguishing between physical and mental impairments. As set forth
in those editions, percentage impairment ratings for mental disorders
are subjective. In essence, they are arbitrary. Arbitrariness is the very
vice that the Equal Protection and Due Process Clauses forbid. The Montana
impairment rating statutes do not violate either equal protection or due
process principles.

V. Attorney Fees and Penalty

¶79 Attorney fees and a penalty
may be awarded only if the insurer's conduct is unreasonable. §§ 39-71-612
and -2907, MCA.

¶80 Initially, claimant is
not entitled to attorney's fees or a penalty with respect to the State
Fund's subrogation claim. Under section 39-71-612, MCA (1991), attorney
fees may be awarded only if the controversy relates to "compensation"
due claimant. Under section 39-71-2907, MCA (1991), a penalty attaches
only to "benefits due a claimant" which have been delayed or refused.
In O'Brien v. State Compensation Ins. Fund, order granting partial
summary judgment (February 10, 1998), I determined that a claim for subrogation
with respect to benefits already paid does not constitute benefits
due. No penalty or attorney fees attach to such claim.

¶81 Claimant is not entitled
to attorney fees or a penalty with respect to her claim for the additional
impairment award she sought. She did not prevail in her request.

¶82 Claimant is not entitled
to attorney fees or a penalty with respect to a full 20% award for lost
wages. While the Court awarded the full 20%, it has also found that the
insurer's contention that she was entitled to only 10% was reasonable.

¶83 Claimant is entitled to
a 20% penalty with respect to the 10% for physical restrictions, 10% for
wage loss, and medical expenses for an MRI and EMG since the State Fund
unreasonably delayed or refused those benefits. At the close of trial,
the Court ruled that claimant is also entitled to attorney fees with respect
to those amounts, however, upon further review of the attorney fee statute
and case law, I conclude that I erred in my oral ruling and that claimant
is not entitled to attorney fees because the amounts were conceded prior
to the commencement of trial.

39-71-612. Costs
and attorneys' fees that may be assessed against an insurer by workers'
compensation judge. (1) If an insurer pays or submits a written
offer of payment of compensation under chapter 71 or 72 of this title
but controversy relates to the amount of compensation due, the case
is brought before the workers' compensation judge for adjudication of
the controversy, and the award granted by the judge is greater than
the amount paid or offered by the insurer, a reasonable attorney's fee
and costs as established by the workers' compensation judge if the case
has gone to a hearing may be awarded by the judge in addition to the
amount of compensation.

(2) An award of attorneys'
fees under subsection (1) may only be made if it is determined that
the actions of the insurer were unreasonable. Any written offer of payment
made 30 days or more before the date of hearing must be considered a
valid offer of payment for the purposes of this section.

If an employer or insurer
pays or tenders payment of compensation under chapter 71 or 72 of this
title, but controversy relates to the amount of compensation due and
the settlement or award is greater than the amount paid or tendered
by the employer or insurer, a reasonable attorney's fee as established
by the division or the workers' compensation judge if the case has gone
to a hearing, based solely upon the difference between the amount settled
for or awarded and the amount tendered or paid, may be awarded in addition
to the amount of compensation.

Field at 83, 847 P.2d
at 308 (quoting section 39-71-612, MCA (1979)). The current provision
does not use the word controversy and has eliminated reference to settlement
and the power of the division to award attorney fees, however, it retains
the qualification that for attorney fees to be awarded by the Court the
case must have gone to hearing and the Court must have awarded additional
compensation. Under Lasar and Field, where the insurer
concedes the issue prior to hearing, there is nothing to adjudicate.

¶85 The State Fund conceded
liability for the 10% labor restriction, a 10% wage loss, the MRI and
the EMG sometime prior to trial. It is not clear exactly how long prior
to trial the issues were conceded but the timing is not critical, all
that is required is that the concession be made prior to trial and eliminate
the need for an adjudication. The concession of the twin 10% amounts was
made, according to claimant's counsel, by prior counsel for the State
Fund, who was replaced approximately three weeks prior to trial. The concession
of liability for the MRI and EMG was made shortly after Dr. Dietrich's
deposition on August 31, 1998. Thus, those matters were not presented
for adjudication and adjudication was unnecessary. No attorney fees are
due with respect to the matters.

VI. Costs

¶86 Since the claimant has
prevailed with respect to some of her prayers for relief, she is entitled
to costs in an amount to be determined by this Court.

JUDGMENT

¶87 Claimant is entitled to
only 10% for physical restrictions, pursuant to section 39-71-703(3)(d),
MCA (1991).

¶88 Pursuant to section 39-71-703(3)(c),
MCA (1991), claimant is entitled to and the State Fund shall pay 20% for
loss of wages.

¶89 Claimant is not entitled
to a further impairment award with respect to her psychological injuries.

¶90 Claimant is not entitled
to a penalty with respect to (1) the State Fund's assertion of a subrogation
interest in monies she recovered from a security alarm manufacturer; (2)
her request for a further impairment award; (3) one half of the 20% wage
loss award; and (4) the Prevacid prescription.

¶91 Claimant is entitled to
a penalty with respect to (1) the 10% award for physical restrictions;
(2) one half of the 20% wage loss award; and (3) the amounts due for a
MRI and EMG.

¶92 Claimant is not entitled
to attorney fees.

¶93 Claimant is entitled to
her costs. The Court has received her memorandum of costs and the State
Fund's opposition to some of the costs she seeks. The amount of costs
due will be addressed in a separate order.

¶94 This JUDGMENT is certified
as final for purposes of appeal pursuant to ARM 24.5.348.

¶95 Any party to this dispute
may have 20 days in which to request a rehearing from these findings of
fact, conclusions of law and judgment.